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The Reserve Bank of India has doubled the minimum subscription per investor in non-convertible debentures issued by non-banking finance companies to Rs 20,000.
Earlier, an investor could apply for a minimum of Rs. 10,000 or 10 NCDs.
The increase in the minimum subscription per investor could prove to be dampener for NBFCs seeking to raise resources via NCDs.
In its revised guidelines on private placement of NCDs (maturity more than 1 year) by NBFCs, the RBI said issuance of private placement of NCDs will be in two separate categories, those with a maximum subscription of less than Rs. 1 crore and those with a minimum subscription of Rs. 1 crore and above per investor.
Tax exempt bonds offered by NBFCs are exempted from the applicability of the revised guidelines, the RBI said.
As per the revised guidelines, there will be a limit of 200 subscribers for every financial year, for issuance of NCDs with a maximum subscription of less than Rs. 1 crore, and such subscription will be fully secured, the RBI said.
There will be no limit on the number of subscribers in respect of issuances with a minimum subscription of Rs. 1 crore and above. The option to create security in favour of subscribers will be with the issuers.
The RBI said an NBFC cannot extend loans against the security of its own debentures (issued either by way of private placement or public issue).
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